U.S. Beer Sales Fall 6.3 Percent as Gas Prices Rise

U.S. beer sales volumes fell 6.3 percent year over year through the week ending May 2, according to Nielsen-tracked scanner data for beer, malt beverages and cider. The decline occurred on both a two-week and four-week basis and reversed earlier improvements that had limited category declines to about 3 percent between November and mid-April.

The weakness has been most pronounced in the convenience-store channel, including chains such as 7-Eleven, Wawa, Shell and Exxon, where volumes dropped roughly 9 percent year over year for the two weeks since April 26. Convenience stores are highly sensitive to gas-station traffic and impulse purchases tied to commuting and travel.

Average U.S. gasoline prices stand at about $4.51 a gallon, according to AAA. Prices have risen about 52 percent since the start of the Iran conflict. States with the highest fuel costs have recorded the largest beer-volume slowdowns. California posted the sharpest deterioration, with a 16 percent deceleration in beer volume between the four weeks trailing May 2 and the four weeks trailing April 4.

Gasoline in the state averaged $6.16 per gallon during that period. Arizona and Texas also saw notable declines of 10 percent and nearly 7 percent, respectively, with gas prices averaging $4.82 and $4.00 a gallon.

The slowdown has spread beyond beer into other beverage categories, the data show. One-third of respondents to the University of Michigan consumer-sentiment survey in May cited gas prices as their biggest concern, as overall confidence reached multi-year lows.

A negative correlation has appeared between the absolute price of gasoline in a given state and the sequential change in beer, malt-beverage and cider volume growth. The relationship is most visible in higher-cost fuel markets.